Managing reverse logistics channels with data envelopment analysis

The management of the logistics systems in distribution channels is a complex process. Integration is needed on all levels to insure channel efficiency and maintain high levels of customer service. Numerous management science tools are available to logistics managers to help them evaluate traditional channel operation. In this article the authors apply an analytical method to help logistics managers manage even more complex systems, reverse logistics systems. The management science method is data envelopment analysis (DEA), which provides logistics managers with an understanding of the cost interactions and efficiencies of the channel members (decision-making units) in reverse logistics channels. We apply DEA to the reverse flows involved in municipal solid waste management systems to determine if the method could be used to aid managers of reverse logistics channels in running their distribution systems. DEA is an effective analytical toot in afield that lacks reliable and accurate methods for monitoring reverse channel performance.